Apple Shifts iPhone Chip Suppliers

SEOUL—Apple Inc. AAPL +0.62%has recently shifted some memory-chip orders for its coming iPhone from Samsung Electronics Co. 005930.SE +4.52%to other Asian chip makers, people familiar with the matter said Friday, suggesting that the U.S. company is diversifying its component suppliers as patent disputes between the two technology giants escalate.

As patent disputes continue, Apple shifts its chip orders for the new iPhone from Samsung to other companies. The WSJ’s Yun-Hee Kim explains the future of their rocky relationship.

A person familiar with the situation said AppleAAPL +0.62%has been ordering more memory chips used to store data in its smartphones from South Korea-based SK Hynix Inc. 000660.SE +7.66%However, Samsung will still be supplying the main processors used to power the new iPhone, another person familiar with the situation said.

“Orders to SK Hynix for both mobile DRAM and NAND flash memory chips from Apple have risen in recent months,” said one of the people, who declined to be named.

Spokesmen for SK Hynix and Samsung declined to comment. A spokesman for Apple in Korea also declined to comment.

Bloomberg NewsAn Apple Inc. iPhone 4S smartphone.

Samsung, which competes with Apple in the smartphone market, is also one of Apple’s biggest component suppliers. In addition to memory chips and processors, it also supplies the displays used in Apple’s iPads. However, the new iPhone is expected to be equipped with displays from Japan’s Sharp Corp., 6753.TO +3.00%Korea’s LG Display Co., 034220.SE +2.04%and Japan Display Inc., according to other people familiar with the situation, as it uses a different panel manufacturing technology that Samsung doesn’t use. Apple is also likely diversifying its supply chain for chips in anticipation of strong demand for its product.

Analysts said that the ongoing high-profile litigation between the two companies may have accelerated Apple’s move to reduce its dependence on Samsung. Read More